JOHANNESBURG – Prosus, the international internet division of Naspers, fell 5.21 percent to R1 020.42 on Wednesday on negative sentiment towards Chinese entertainment giant Tencent, with JSE stocks falling in tandem.
The FTSE/JSE All Share Index (Alsi) fell 0.65 percent to 55 572.18 points, while the financial index also slipped.
Banking stocks followed suit, with Standard Bank leading the charge, falling 3.50 percent to R175, while Nedbank was down 1.46 percent to R240.55.
FirstRand closed 0.82 percent lower at R67.74, and Absa was 0.71 percent weaker at R162.94.
Prosus owns 31 percent of Tencent, the fourth-largest internet company in the world, after it was spun off from Naspers last month.
Lester Davids, a trader at Unum Capital, said yesterday that the market declined largely due to the fall of Naspers, as it had a substantial weighting in the Alsi.
Davids said post the unbundling of Naspers, the group holds just more than 70 percent of Prosus, which holds a stake in Tencent.
“This morning in Hong Kong, we saw the Tencent share price come under pressure with no discernible reason for its 2.23 percent drop.
"This is the reason why Naspers and the All Share Index are lower for the session,” said Davids.
Naspers was unbundled with the listing of Prosus, a move that was seen as marking another key step in the restructuring of the South African internet giant's assets.
Michael Treherne, a portfolio manager at Vestact Asset Management, said Tencent had been in a tight spacing after losing 20 percent on the Hong Kong Stock Exchange in the past six months.
Treherne said Tencent had fallen to $320 (R4 694) a share on the Hong Kong Stock Exchange from $400 a share six months ago.
“The unrest in Hong Kong has not helped the share, either,” he said.
On Tuesday, Prosus made a hostile R93 billion bid for Just Eat, entering into a transaction that could disrupt its merger with Dutch rival Takeaway.
Prosus offered R135.75 a share, representing a 20 percent premium to Just Eat’s closing price on Monday.
Yesterday, Aberdeen Standard Investments, which owns a 5.2 percent stake in Just Eat, said Prosus needed to come up with a significantly higher bid.
“We believe Prosus’s current all-cash offer of 710 pence (R134.75) significantly undervalues the group,” investment director Frederik Nassauer said.
“In our view, Prosus would need to raise their cash offer by at least 20 percent in order for it to be deemed attractive.”
Mergence Investment Managers money manager Peter Takaendesa said the slump reflected weakness in technology stocks following a warning by US semiconductor maker Texas Instruments that it saw broad-based weakness across most markets and sectors.
“There have been a couple of warnings from Texas Instruments about weakness within the technology supply chain,” Takaendesa said.